Dow Futures Pointed Lower on Huawei Headwinds

Chip stocks are taking a beating this morning

Managing Editor
May 20, 2019 at 9:13 AM
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Futures on the Dow Jones Industrial Average (DJI) are pointed toward a negative open, as Alphabet (GOOGL) and other tech giants have begun taking steps to cut ties with China's Huawei Technologies, only days after President Donald Trump banned U.S. companies from supplying components to the telecommunications name. Several chipmakers with Huawei ties are also seeing their shares sink in pre-market trading, sending Nasdaq-100 Index (NDX) futures to a triple-digit deficit.

Continue reading for more on today's market, including: 

OV Futures Chart May 20

5 Things You Need to Know Today

  1. The Chicago Board Options Exchange (CBOE) saw 1.08 million call contracts traded on Friday, compared to 877,762 put contracts. The single-session equity put/call ratio rose to 0.81, while the 21-day moving average moved up to 0.66.
  2. Lumentum Holdings Inc (NASDAQ:LITE) is down 6% in electronic trading, after halting shipments to the aforementioned Huawei. In response, Lumentum also lowered its quarterly outlook, saying Huawei accounted for 18% of its revenue last quarter. LITE is eyeing its third straight bear gap on the charts, and is down 25% so far in May.
  3. Another chip stock suffering Huawei-related blows is Qorvo Inc (NASDAQ:QRVO), the equity already down 4.6% in pre-market trading. Qorvo reportedly suspended shipments to Huawei on Friday. QRVO stock is down 15.4% in May, and looks to also be eyeing a third straight daily bear gap.
  4. Meal-kit service Blue Apron Holdings Inc (NYSE:APRN) is proposing a reverse stock split of between 1-for-5 to 1-for-15 shares, now sending the idea for shareholder approval. APRN has struggled since its June 2017 initial public offering (IPO), and is now trading under $1. Over the past 12 months, the security has shed 73%.
  5. Today will bring Fed speeches from Philadelphia Fed President Patrick Harker, New York Fed President John Williams, and Fed Vice Chairman Richard Clarida. Cracker Barrel (CBRL), International Game Technology (IGT), and Red Robin Gourmet (RRGB) will post earnings

stock market news may 20

Trade Tensions Weigh on Asian Markets

Markets in Asia were mostly lower, led by losses in China and Hong Kong. Trade tensions weighed on the Shanghai Composite and Hang Seng, as did news of Google booting Huawei from its some of its services. As such, the former index closed down 0.4%, and the latter lost 0.6%. South Korea’s Kospi finished fractionally lower, while Japan’s Nikkei managed a 0.2% win thanks to a stronger-than-expected first-quarter gross domestic product (GDP).

European stocks are falling at midday. The technology sector, especially chipmakers, are struggling, likely due to fallout around the Huawei drama. Another name in focus is budget airline Ryanair, as the shares slide on disappointing financial results. London’s FTSE 100 is off 0.9%, the German DAX is down 1.4%, and France’s CAC 40 is 1.5% below breakeven.

 

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